Now that the dust has settled following the U.S. Supreme Court’s ruling in Facebook v. Duguid, a survey of recent TCPA claims shows that courts across the country are still grappling with how properly to define an “automated telephone dialing system” and the proper stage of the litigation to resolve that question.

By way of brief background, the Telephone Consumer Protection Act[1] (“TCPA”), enacted in 1991, is a federal statute aimed at protecting consumers from companies that utilize an “automated telephone dialing system” (“ATDS”)[2] to engage in mass telemarketing methods, including robocalls. In the years since the TCPA’s adoption, the methods that businesses use to engage customers, and vice-versa, have changed dramatically. In particular, text messaging has become a common method for companies to communicate with customers, including to solicit feedback, announce promotional opportunities, provide order status updates, and utilize two-factor security authentication.

While the TCPA was originally enacted to target unwanted telephone calls and faxes, courts have since interpreted the protections provided by the TCPA to include text messages.[3] As such, the TCPA prohibits companies from sending any non-emergency text message to a mobile phone using an ATDS without the consumer’s prior consent. The TCPA provides for statutory damages of $500 per violation—and up to $1,500 for willful or knowing violations. Consumers can also sue for injunctive relief and actual monetary losses.

Courts struggled with the definition of an ATDS for a number of years. The U.S. Supreme Court recently provided clarity on that issue in its 2021 decision Facebook, Inc. v. Duguid.[4] In a unanimous ruling, the Court concluded that to qualify as an ATDS under the TCPA, a device must have the capacity to either (1) store a telephone number using a random or sequential number generator; or (2) produce a telephone number using a random or sequential number generator.

In the 18 months following the Supreme Court’s decision, courts across the country have applied that clarified standard to analyze TCPA claims alleging the receipt of unsolicited text messages. One issue that has proved important, and often dispositive, in these cases is whether the defendant was randomly generating numbers to contact customers, or—as is more commonplace—using its system to contact numbers already stored in its files.

In the latter case, many courts have found that sending a text message to a phone number stored in a company database does not constitute a TCPA violation because the technology used to send the text message does not qualify as an ATDS. For example, in Cross v. State Farm Mutual Automobile Insurance Co., a federal district court in Arkansas analyzed a complaint alleging that State Farm utilized an ATDS when it sent the plaintiff a text message about her insurance claim. The plaintiff alleged that the system randomly or sequentially generated a list of phone numbers from its database, which included the plaintiff’s number, and then sent a text message to those numbers generated.[5] The court rejected that contention and granted defendant’s motion to dismiss, concluding that the number itself was not randomly or sequentially generated—as is required of an ATDS—and that State Farm instead selected the number from its “established dataset of phone numbers” and then sent the text message specifically concerning the plaintiff’s outstanding insurance claim.

Federal district courts in California, Michigan, Illinois, Texas, Washington, and New Jersey (among others) have taken a similar approach, dismissing claims alleging TCPA violations for text messages and phone calls made to specific individuals whose numbers were compiled into a preproduced list of phone numbers, as opposed to generated randomly by an auto dialer.[6] Most notably, the U.S. Court of Appeals for the Ninth[7] recently held that under the TCPA’s plain text, an ATDS “must randomly or sequentially generate telephone numbers, not just any number.”[8] 

On the other hand, some federal courts have refused to adopt that narrow definition of ATDS. Those courts have held that even if a phone number is not randomly generated and already exists in the company’s files, the use of a system that employs a random number generator to determine the order in which to pick phone numbers from the existing list could qualify as an ATDS. For example, in McEwen v. National Rifle Association of America, a federal district court in Maine denied the defendant’s motion to dismiss, reasoning that “a device that [contacts] phone numbers from a preproduced list may still be an ATDS, so long as it uses a random or sequential number generator to determine the order in which to pick.”[9] Courts in Colorado and Texas have adopted a similar interpretation of ATDS,[10] and Florida’s state law equivalent of the TCPA includes in its definition of an ATDS a “system for the selection … of telephone numbers.”[11]

Courts also differ in when they resolve the question of whether a given system constitutes an ATDS under the TCPA. Several courts in Colorado, Missouri, and Texas (among others) have suggested that Duguid’s definitional clarification should not control at the pleadings stage, when TCPA plaintiffs often have little “personal knowledge of the defendant’s telephone system.”[12] Those courts have denied motions to dismiss challenging the complaint’s allegations of an ATDS and have allowed TCPA plaintiffs to proceed with discovery in order to reveal the technology that was used at the time of the alleged violations, thereby delaying the resolution of that question until summary judgment.[13]

In contrast to that permissive approach, a federal district court in California has made clear its view that Duguid’s definition of ATDS applies at the pleading stage. In Gross v. GG Homes, Inc., the court explained the plaintiff’s TCPA claims should be dismissed for failure to state a claim because the text messages at issue directly addressed the plaintiff by name and therefore belied the notion that the defendant used a device that randomly or sequentially generated the plaintiff’s phone number.[14] The court reasoned that while “the definition of an ATDS under Duguid will pose a more imposing barrier at the summary judgment stage,” the definition of an ATDS nevertheless remains relevant at the pleadings stage.[15]

The Supreme Court’s decision in Duguid provides some degree of clarity on the definition of ATDS. That said, recent case law reflects yet another split concerning the meaning of ATDS—and resulting uncertainties concerning TCPA’s reach for companies that use text messages to communicate with customers. Companies engaged in e-commerce nationwide must ensure that their business policies and practices are structured to minimize risk irrespective of the jurisdiction where any particular TCPA suit is brought.

[1] 47 U.S.C § 227 et seq.

[2] An ATDS is “equipment which has the capacity: (A) to store or produce telephone numbers to be called [or texted], using a random or sequential number generator; and (B) to dial such numbers.” 47 U.S.C § 227(1)(A).

[3] See, e.g., Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 667 (2016).

[4] 141 S. Ct. 1163 (2021).

[5] Cross v. State Farm Mut. Auto. Ins. Co., No. 1:20-CV-01047, 2022 WL 193016 (W.D. Ark. Jan. 20, 2022).

[6] See Pascal v. Concentra, Inc., No. 19-cv-02559, 2021 WL 5906055, at *8 (N.D. Cal. Dec. 14, 2021); Barry v. Ally Financial, Inc., No. 20-12378, 2021 WL 2936636 (E.D. Mich. July 13, 2021); Watts v. Emergency Twenty Four, Inc., No. 20-cv-1820, 2021 WL 2529613, at *3 (N.D. Ill. June 21, 2021); Samataro v. Kelly Williams Realty, Inc., No. 1:18-cv-775-RP, 2021 WL 4927422, at *4 (W.D. Tex. Sept. 27, 2021); Borden v. eFinancial, LLC, No. C19-1430JLR, 2021 WL 3602479, at *5 (W.D. Wash. Aug. 13, 2021); Champion v. Credit Pros Int’l Corp., No. CV2110814JXNJBC, 2022 WL 3152657, at *4 (D.N.J. Aug. 5, 2022).

[7] The Ninth Circuit includes Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, the Northern Mariana Islands, Oregon, and Washington.

[8] Borden v. eFinancial, LLC, No. 21-35746, 2022 WL 16955661, at *2 (9th Cir. Nov. 16, 2022) (emphasis in original).

[9] McEwen v. Nat’l Rifle Ass’n of Am., No. 2:20-CV-00153-LEW, 2021 WL 5999274, at *4 (D. Me. Dec. 20, 2021), motion to certify appeal granted, No. 2:20-CV-00153-LEW, 2022 WL 2073354 (D. Me. June 9, 2022) (internal quotation marks and alterations omitted).

[10] Montanez v. Future Vision Brain Bank, LLC, No. 20-cv-02959, 2021 WL 1697928 (D. Colo. Apr. 29, 2021); Atkinson v. Pro Custom Solar LCC, No. SA-21-CV-178-OLG, 2021 WL 2669558, at *1 (W.D. Tex. June 16, 2021); Carl v. First National Bank of Omaha, No. 2:19-cv-00504, 2021 WL 2444162 (D. Me. June 15, 2021).

[11] Fla. Stat. Ann. § 501.059 (West).

[12] Libby v. Nat’l Republican Senatorial Comm., 551 F. Supp. 3d 724, 729 (W.D. Tex. 2021).

[13] Id.; see also Montanez v. Future Vision Brain Bank, LLC, 536 F. Supp. 3d 828, 837 (D. Colo. 2021) (“While the [Duguid] decision elucidates the definition of an ATDS, that holding will prove far more relevant on a future motion for summary judgment than it does [at the pleading stage]. At this stage, the Court must take all well-pleaded facts as true and cannot consider outside evidence without converting the Motion into a motion for summary judgment.”); Miles v. Medicredit, Inc., No. 4:20-CV-01186 JAR, 2021 WL 2949565, at *4 (E.D. Mo. July 14, 2021) (quoting Atkinson v. Pro Custom Solar, LLC, No. 5:21-CV-178, ECF No. 11 at 2-3 (W.D. Tex. June 16, 2021) (“Plaintiff has pled enough facts to proceed with discovery, at which time he will have the opportunity to discover the precise technology that was used at the time of the alleged TCPA violations. ‘If the technology does not meet the definition set forth in the statute, as construed by the Supreme Court in [Duguid],’ then [Defendant] may move for summary judgment on that basis.”).

[14] No. 321CV00271DMSBGS, 2021 WL 4804464, at *3 (S.D. Cal. Oct. 14, 2021) (granting defendant’s motion for reconsideration).

[15] Id. at *2 (citing Hufnus v. DoNotPay, Inc., No. 20-cv-08701-VC, 2021 WL 2585488, at **1-2 (N.D. Cal. June 24, 2021) (dismissing with prejudice a complaint that did not support an inference that a random or sequential number generator was used); Guglielmo v. CVS Pharmacy, Inc., No. 3:20cv1560 (JBA), 2021 WL 3291532, at *2 (D. Conn. Aug. 2, 2021) (dismissing a case where the plaintiff did not allege that his number was stored or produced with a random or sequential number generator); Meeks v. Buffalo Wild Wings, Inc., No. CV 18-2673 PA, 2018 WL 5093942, at *4 (C.D. Cal. Apr. 13, 2018) (dismissing complaint where facts suggested texts were targeted to plaintiff and the “non-conclusory allegations d[id] not render it plausible that an ATDS was used”); Weisberg v. Stripe, Inc., No. 16-cv-00584-JST, 2016 WL 3971296, at *3 (N.D. Cal. July 25, 2016) (dismissing complaint where allegations “suggest[ed] direct targeting that is inconsistent with the sort of random or sequential number generation required for an ATDS”)).